Apple Avoids Mass Layoffs Amid Ongoing Slowdown Because of Efficient Hiring During the Pandemic: Details

Apple has frozen hiring in some areas and is keeping a lid on spending, but it hasn’t yet resorted to mass layoffs like its rivals.

By Saksha Menezes, Bloomberg | Updated: 10 February 2023 15:16 IST

Apple Avoids Mass Layoffs Amid Ongoing Slowdown Because of Efficient Hiring During the Pandemic: Details

Photo Credit: Reuters

Many tech companies admit that they hired too much during the pandemic

Highlights

Apple's headcount increased only 20 percent between 2020 to 2022
Apple generated far more revenue per new hire than its peers
The company also generates some of the highest sales per square foot

There's a reason why Apple is under less pressure than tech peers to slash jobs during the current slowdown: It hired more efficiently in the first place.

During the industry's pandemic-fueled hiring binge, Apple added fewer employees than other big tech firms. On top of that, the company generated far more revenue per new hire than its peers, according to data compiled by Bloomberg. That more cautious approach is paying off now. Though Apple has frozen hiring in some areas and is keeping a lid on spending — especially outside research and development — it hasn't yet resorted to the mass layoffs underway at Amazon.com, Alphabet's Google, Meta and other tech giants.

“This signals a better quality of management at Apple compared to other technology companies that clearly read the signals during the pandemic the wrong way,” said Saxo Bank A/S's Peter Garnry.

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The company announced plans to shore up its human resources this week by hiring its first chief people officer. HR duties had been overseen by retail chief Deirdre O'Brien in a dual role.

Many tech companies admit that they hired too much during the pandemic, betting that lifestyle changes — including remote work, e-commerce spending and video-game habits — would bring a bigger windfall. Now they're dealing with the aftermath. Zoom Technologies Inc., one of the biggest beneficiaries of Covid-19 lockdowns, just announced this week that it was cutting 15 percent of its jobs.

Apple, meanwhile, was more cautious. Its headcount increased just 20 percent from 2020 to 2022, compared with a 60 percent gain at Alphabet and a near-doubling at Amazon. Those two companies went on to announce playoffs of roughly 30,000 combined.

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Apple also generated much more revenue per additional employee during the pandemic years than it did in the previous three-year stretch. That's a sharp contrast with most of its technology peers. However, headcount can't fully explain Apple's edge over competitors. The company also generates some of the highest sales per square foot — an indication that its efficiency goes beyond hiring policies.

“Apple is frugal by nature,” said Credit Suisse Group AG analyst Shannon Cross. “It comes down to the management's stewardship of shareholder dollars and a tight focus on what growth opportunities to invest in.”

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Apple launched the iPad Pro (2022) and the iPad (2022) alongside the new Apple TV this week. We discuss the company's latest products, along with our review of the iPhone 14 Pro on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

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